HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Friday, 7 September 2012

The Joy of Retrospective Taxation

The Treasury, in its infinite "wisdom", has sought to clarify its stance on retrospective taxation in the light of queries raised by the Treasury Select Committee following retrospective taxes being raised on Barclays and new variations of stamp duty land tax (SDLT) which are retrospective.

The Treasury said (as per Step Journal):
"The government agrees that changes to tax legislation where the change is to have effect from a date earlier than the date of announcement should be restricted to wholly exceptional circumstances. The government has made a commitment to this effect in the Protocol on unscheduled announcements, published in ‘Tackling tax avoidance’ at Budget 2011. 

By observing the Protocol, the government aims to strike the right balance between the rights of taxpayers affected by the change and the interests of the generality of taxpayers. In doing so we ensure that our response to avoidance risk is proportionate and limited to what is necessary to address that risk. The Forum of Tax Professionals review announcements as a standing agenda item at its regular meetings and provide Ministers with a view on how the Protocol is being observed in practice."
All clear now?

Would anyone care to define what "wholly exceptional circumstances" might actually be?

Tax does have to be taxing.

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  1. Whenever they can get away with it?

    1. Is the answer to look closely at the green paper relating to this and discover what those who drafted trhe legislation intended it to mean rather than what HMRC decide is their "interpretation" of the legislation?
      Sounds a bit heavy and all that but its a basic precept of the law and what the Judiciary use as a starting point. Granted no case law though!

    2. What legislation are you referring to? This is a public statement dealing with when retrospective legislation will be used. There's no legislation here to interpret, as far as I can see, nor will there be a green paper.

    3. I am assuming that you followed the links and read the number of times the word legislation is used and proceeded by "changes to...".
      In order to accept the need for change it will have been neccesary to understand the original and why it needs changing?
      Unless of course you don't bother with what the legislation says because you are a self-policing organisation.

    4. I'm an individual not an organisation, thank you very much, and the links refer to legislation in general, not specific bits of it.

      However, I think you and I may be at crossed purposes. You started your first comment with "is the answer to...". The answer to what? I (perhaps wrongly) assumed you meant the answer to the question of what "exceptional circumstances" means.

      Purposive interpretation of legislation is used for two things that are relevant here: for HMRC to decide whether arrangements need to be challenged and, in limited circumstances (and not "as a starting point") the courts will use it as a guide to interpretation. It's not a good guide as to whether or not the government will go down the retrospective route, though: while it's probably true that they wouldn't do so if they didn't think the arrangements in question didn't go against Parliament's intention (excuse the double negative) there will always be far, far more instances where they think that but don't.

      Stew G

    5. Wotever!
      There We Are Then.

  2. "Would anyone care to define what "wholly exceptional circumstances" might actually be?"

    Don't play innocent, Kenneth. Surely you're not so naive as to expect a definition of a word like that in such a context.

    If one were to be given, every scheme promoter would immediately start tacking on features designed to ensure that their wheezes didn't fall within the definition. There would be judicial reviews all over the place. In short, a perfectly legal (words you seem to consider to be determinative of all that is moral and desirable in certain other contexts) means of protecting the public finances from egregious attacks could be neutered.

    Stew G